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Nick Leeson and Barings Bank

Nick Leeson, the ’rogue trader’ responsible for the demise of Barings Bank had applied in 1992 for registration as a dealer with the Securities and Futures Authority (SFA) in the UK. However, the SFA discovered that Leeson had made a false statement on his application form, about unsatisfied judgement debts against him. The SFA queried Barings on this matter and Barings subsequently withdrew the application.

When Leeson was posted to Singapore, his previous history was never communicated to the Singapore exchange (SIMEX) and in his application to SIMEX, Leeson made a similar false statement that no judgement in civil proceedings had ever been entered against him.

Robert Maxwell and Mirror Group Newspapers

Mirror Group newspapers collapsed in 1991, however the history of its Chairman and Chief Executive, and his record of unethical business practices, goes back a further twenty years. In 1971, Robert Maxwell was described, in a Department of Trade and Industry (DTI) report, as ’not a person who can be relied on to exercise proper stewardship of a publicly quoted company.’

There is no doubt that Leeson, Maxwell and many others in similar positions, were individually instrumental in getting their respective organisations in the front pages of the national press. But they were able to get away with it because the systems which should have been in place to prevent such abuse were inadequate.

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